1/21/2010 @ 3:20PM

Nokia Takes On Google In Maps

Nokia
on Thursday surprised both the wireless and GPS industries when it said it would offer free navigation service on its high-end smart phones. The feature is part of the company’s revamped Ovi Maps service and includes turn-by-turn voice guidance for drivers and pedestrians. Owners of the
Nokia
N97 mini, 5800 XpressMusic and E72 (and seven other phones), can download the maps now. In the future
Nokia
will ship selected new devices with the maps already loaded. Here’s what you should know about
Nokia
‘s free navigation service.

Why is
Nokia
doing this?

The simple answer is because it can and because it thinks it will help its phone business.

The buzz surrounding
Google’s
introduction of free navigation on its Android phones shows that consumers are interested in this service. Nokia also owns one of the world’s largest mapping data providers (
Navteq
) and a mobile mapping firm called gate5, so it’s relatively simple for them to provide this data. No other handset maker boasts comparable mapping resources. Tero Ojanperä, Nokia’s executive vice president of services, says the potential market for navigation-equipped handsets is in the tens of millions.

Is Ovi Maps better than Google Maps Navigation?

The two services have different advantages. Google has built unique features into its maps, such as “Street View” (360-degree images) and “Satellite View” (bird’s-eye perspective). Nokia is including 3-D landmarks for 200 cities around the world and point-of-interest information from Lonely Planet and Michelin guidebooks. Ovi Maps is also designed to be less “bandwidth hungry” than Google Maps, which requires a more constant data connection to view maps. Nokia says Ovi is 10 times more efficient in its use of bandwidth than Google’s service. Ovi Maps will also be available in many more places (74 countries, 46 languages) than Google Maps Navigation, which is currently limited to the U.S. Nokia also contends that its maps are of higher quality than Google’s, due to its close relationship with Navteq.

Will this help Nokia’s U.S. sales?

Though Nokia still reigns as the largest phone maker in the world, its U.S. sales have long lagged companies like Samsung, LG and
Motorola
. Including free navigation with its smart phones should help it stand out and appeal to consumers who would rather get GPS information from their phones than a dedicated portable navigation device. Ovi Maps will likely encourage users to invest in data plans, which could appeal to U.S. operators, making them more inclined to strike deals with Nokia. The caveat is that U.S. consumers have choices other than Nokia. Two Google Android phones, the Nexus One and Droid, already have built-in navigation. Operators like
Sprint Nextel
have been bundling navigation service with their smart phones for months.

What does this mean for Navteq?

In theory, Nokia’s launch of free navigation could rankle other device makers that use Navteq’s mapping data, but it probably won’t affect its partnerships. Nokia runs the Navteq business, which is based in Chicago, at an arm’s distance, industry insiders say. There are also only two large mapping data providers in the world–Navteq and Tele Atlas, which is owned by Dutch navigation device maker TomTom–so companies don’t have much choice in providers.

A TomTom spokesman noted, “While competition continues to be fierce in the development of location-based services and sponsored maps customers have consistently demonstrated a willingness to pay for the best user experience.” A Google spokeswoman said, “We’re pleased to see more free navigation options now available for mobile phone users. This benefits consumers, and provides them with even greater choice.” Representatives for Telenav and Networks In Motion, which make GPS software for phones, declined to comment on the announcement.